Thorstein Veblen
"Why is Economics Not an Evolutionary Science"
The Quarterly Journal of Economics
Volume 12, 1898.
M.G. de Lapouge recently said, "Anthropology is destined to
revolutionise the political and the social sciences as radically
as bacteriology has revolutionised the science of medicine."1 In
so far as he speaks of economics, the eminent anthropologist is
not alone in his conviction that the science stands in need of
rehabilitation. His words convey a rebuke and an admonition, and
in both respects he speaks the sense of many scientists in his
own and related lines of inquiry. It may be taken as the
consensus of those men who are doing the serious work of modern
anthropology, ethnology, and psychology, as well as of those in
the biological sciences proper, that economics is helplessly
behind the times, and unable to handle its subject matter in a
way to entitle it to standing as a modern science. The other
political and social sciences come in for their share of this
obloquy, and perhaps on equally cogent grounds. Nor are the
economists themselves buoyantly indifferent to the rebuke.
Probably no economist today has either the hardihood or the
inclination to say that the science has now reached a definitive
formulation, either in the detail of results or as regards the
fundamental features of theory. The nearest recent approach to
such a position on the part of an economist of accredited
standing is perhaps to be found in Professor Marshall's Cambridge
address of a year and a half ago.2 But these utterances are so
far from the jaunty confidence shown by the classical economists
of half a century ago that what most forcibly strikes the reader
of Professor Marshall's address is the exceeding modesty and the
uncalled for humility of the spokesman for the "old generation."
With the economists who are most attentively looked to for
guidance, uncertainty as to the definitive value of what has been
and is being done, and as to what we may, with effect, take to
next, is so common as to suggest that indecision is a meritorious
work. Even the Historical School, who made their innovation with
so much home grown applause some time back, have been unable to
settle down contentedly to the pace which they set themselves.
The men of the sciences that are proud to own themselves
"modern" find fault with the economists for being still content
to occupy themselves with repairing a structure and doctrines and
maxims resting on natural rights, utilitarianism, and
administrative expediency. This aspersion is not altogether
merited, but is near enough to the mark to carry a sting. These
modern sciences are evolutionary sciences, and their adepts
contemplate that characteristic of their work with some
complacency. Economics is not an evolutionary science -- by the
confession of its spokesmen; and the economists turn their eyes
with something of envy and some sense of baffled emulation to
these rivals that make broad their phylacteries with the legend,
"Up to date."
Precisely wherein the social and political sciences,
including economics, fall short of being evolutionary sciences,
is not so plain. At least, it has not been satisfactorily pointed
out by their critics. Their successful rivals in this matter --
the sciences that deal with human nature among the rest -- claim
as their substantial distinction that they are realistic: they
deal with facts. But economics, too, is realistic in this sense:
it deals with facts, often in the most painstaking way, and
latterly with an increasingly strenuous insistence on the sole
efficacy of data. But this "realism" does not make economics an
evolutionary science. The insistence on data could scarcely be
carried to a higher pitch than it was carried by the first
generation of the Historical School; and yet no economics is
farther from being an evolutionary science than the received
economics of the Historical School. The whole broad range of
erudition and research that engaged the energies of that school
commonly falls short of being science, in that, when consistent,
they have contented themselves with an enumeration of data and a
narrative account of industrial development, and have not
presumed to offer a theory of anything or to elaborate their
results into a consistent body of knowledge.
Any evolutionary science, on the other hand, is a close
knit body of theory. It is a theory of a process, of an unfolding
sequence. But here, again, economics seems to meet the test in a
fair measure, without satisfying its critics that its credentials
are good. It must be admitted, e.g., that J.S. Mill's doctrines
of production, distribution, and exchange, are a theory of
certain economic processes, and that he deals in a consistent and
effective fashion with the sequences of fact that make up his
subject matter. So, also, Cairnes's discussion of normal value,
of the rate of wages, and of international trade, are excellent
instances of a theoretical handling of economic processes of
sequence and the orderly unfolding development of fact. But an
attempt to cite Mill and Cairnes as exponents of an evolutionary
economics will produce no better effect than perplexity, and not
a great deal of that. Very much of monetary theory might be cited
to the same purpose and with the like effect. Something similar
is true even of late writers who have avowed some penchant for
the evolutionary point of view; as, e.g., Professor Hadley, -- to
cite a work of unquestioned merit and unusual reach. Measurably,
he keeps the word of promise to the ear; but any one who may cite
his Economics as having brought political economy into line as an
evolutionary science will convince neither himself nor his
interlocutor. Something to the like effect may fairly be said of
the published work of that later English strain of economists
represented by Professors Cunningham and Ashley, and Mr Cannan,
to name but a few of the more eminent figures in the group.
Of the achievements of the classical economists, recent and
living, the science may justly be proud; but they fall short of
the evolutionist's standard of adequacy, not in failing to offer
a theory of a process or of a developmental relation, but through
conceiving their theory in terms alien to the evolutionist's
habits of thought. The difference between the evolutionary and
the pre-evolutionary sciences lies not in the insistence on
facts. There was a great and fruitful activity in the natural
sciences in collecting a collating facts before these sciences
took on the character which marks them as evolutionary. Nor does
the difference lie in the absence of efforts to formulate and
explain schemes of process, sequence, growth, and development in
the pre-evolutionary days. Efforts of this kind abounded, in
number and diversity; and many schemes of development of great
subtlety and beauty, gained a vogue both as theories of organic
and inorganic development and as schemes of the life history of
nations and societies. It will not even hold true that our elders
overlooked the presence of cause and effect in formulating their
theories and reducing their data to a body of knowledge. But the
terms which were accepted as the definitive terms of knowledge
were in some degree different in the early days from what they
are now. The terms of thought in which the investigators of some
two or three generations back definitively formulated their
knowledge of facts, in their last analyses, were different in
kind from the terms in which the modern evolutionist is content
to formulate his results. The analysis does not run back to the
same ground, or appeal to the same standard of finality or
adequacy, in the one case as in the other.
The difference is a difference of spiritual attitude or
point of view in the two contrasted generations of scientists. To
put the matter in other words, it is a difference in the basis of
valuation of the facts for the scientific purpose, or in the
interest from which the facts are appreciated. With the earlier
as with the later generation the basis of valuation of the facts
handled is, in matters of detail, the causal relation which is
apprehended to subsist between them. This is true to the greatest
extent for the natural sciences. But in their handling of the
more comprehensive schemes of sequence and relation -- in their
definitive formulation of the results -- the two generatons
differ. The modern scientist is unwilling to depart from the test
of causal relation or quantitative sequence. When he asks the
question, Why? he insists on an answer in terms of cause and
effect. He wants to reduce his solution of all problems to terms
of the conservation of energy or the persistence of quantity.
This is his last recourse. And this last recourse has in our time
been made available for the handling of schemes of development
and theories of a comprehensive process by the notion of a
cumulative causation. The great deserts of the evolutionist
leaders -- if they have great deserts as leaders -- lie, on the
one hand, in their refusal to go back of the colorless sequence
of phenomena and seek higher ground for their ultimate syntheses,
and, on the other hand, in their having shown how this colorless
impersonal sequence of cause and effect can be made use of for
theory proper, by virtue of its cumulative character.
For the earlier natural scientists, as for the classical
economists, this ground of cause and effect is not definitive.
Their sense of truth and substantiality is not satisfied with a
formulation of mechanical sequence. The ultimate term in their
systematisation of knowledge is a "natural law." This natural law
is felt to exercise some sort of a coercive surveillance over the
sequence of events, and to give a spiritual stability and
consistence to the causal relation at any given juncture. To meet
the high classical requirement, a sequence -- and a developmental
process especially -- must be apprehended in terms of a
consistent propensity tending to some spiritually legitimate end.
When facts and events have been reduce to these terms of
fundamental truth and have been made to square with the
requirements of definitive normality, the investigator rests his
case. Any causal sequence which is apprehended to traverse the
imputed propensity in events is a "disturbing factor." Logical
congruity with the apprehended propensity is, in this view,
adequate ground of procedure in building up a scheme of knowledge
or of development. The objective point of the efforts of the
scientists working under the guidance of this classical
tradition, is to formulate knowledge in terms of absolute truth;
and this absolute truth is a spiritual fact. It means a
coincident of facts with the deliverances of an enlightened and
deliberate common sense.
The development and the attenuation of this preconception
of normality or of a propensity in events might be traced in
detail from primitive animism down through the elaborate
discipline of faith and metaphysics, overruling Providence, order
of nature, natural rights, natural law, underlying principles.
But all that may be necessary here is to point out that, by
descent and by psychological content, this constraining normality
is of a spiritual coherence to the facts dealt with. The question
of interest is how this preconception of normality has fared at
the hands of modern science, and how it has come to be superseded
in the intellectual primacy by the latter day preconception of a
non-spiritual sequence. This question is of interest because its
answer may throw light on the question as to what chance there is
for the indefinite persistence of this archaic habit of thought
in the methods of economic science.
Under primitive conditions, men stand in immediate personal
contact with the material facts of the environment; and the force
and discretion of the individual in shaping the facts of the
environment count obviously, and to all appearance solely, in
working out the conditions of life. There is little of impersonal
or mechanical sequence visible to primitive men in their everyday
life; and what there is of this kind in the processes of brute
nature about them is in large part inexplicable and passes for
inscrutable. It is accepted as malignant or beneficent, and is
construed in the terms of personality that are familiar to all
men at first hand, -- the terms know to all men by first hand
knowledge of their own acts. The inscrutable movements of the
seasons and of the natural forces are apprehended as actions
guided by discretion, will power, or propensity looking to an
end, much as human actions are. The processes of inanimate nature
are agencies whose habits of life are to be learned, and who are
to be coerced, outwitted, circumvented, and turned to account,
much as the beasts are. At the same time the community is small,
and the human contact of the individual is not wide. Neither the
industrial life nor the non-industrial social life forces upon
men's attention the ruthless impersonal sweep of events that no
man can withstand or deflect, such as becomes visible in the more
complex and comprehensive life process of the larger community of
the later day. There is nothing decisive to hinder men's
knowledge of facts and events being formulated in terms of
personality -- in terms of habit and propensity and will power.
As time goes on and as the situation departs from this
archaic character, -- where it does depart from it, -- the
circumstances which condition men's systematisation of facts
change in such a way as to throw the impersonal character of the
sequence of events more and more into the foreground. The
penalties for failure to apprehend facts in dispassionate terms
fall surer and swifter. The sweep of events is force home more
consistently on men's minds. The guiding hand of a spiritual
agency or a propensity in events becomes less readily traceable
as men's knowledge of things grows ampler and more searching. In
modern times, and particularly in the industrial countries, this
coercive guidance of men's habits of thought in the realistic
direction has been especially pronounced; and the effect shows
itself in a somewhat reluctant but cumulative departure from the
archaic point of view. The departure is most visible and has gone
farthest in those homely branches of knowledge that have to do
immediately with modern mechanical processes, such as engineering
designs and technological contrivances generally. Of the
sciences, those have wandered farthest on this way (of
integration of disintegration, according as one may choose to
view it) that have to do with mechanical sequence and process;
and those have best and longest retained the archaic point of
view intact which -- like the moral, social, or spiritual
sciences -- have to do with process and sequence that is less
tangible, less traceable by the use of the senses, and that
therefore less immediately forces upon the attention the
phenomenon of sequence as contrasted with that of propensity.
There is no abrupt transition from the pre-evolutionary to
the post evolutionary standpoint. Even in those natural sciences
which deal with the processes of life and the evolutionary
sequence of events the concept of dispassionate cumulative
causation has often and effectively been helped out by the notion
that there is in all this some sort of a meliorative trend that
exercises a constraining guidance over the course of cause and
effects. The faith in this meliorative trend as a concept useful
to the science has gradually weakened, and it has repeatedly been
disavowed; but it can scarcely be said to have yet disappeared
from the field.
The process of change in the point of view, or in the terms
of definitive formulation of knowledge, is a gradual one; and all
the sciences have shared, though in an unequal degree, in the
change that is going forward. Economics is not an exception to
the rule, but it still shows too many reminiscences of the
"natural" and the "normal," of "verities" and tendencies," of
"controlling principles" and "disturbing causes" to be classed as
an evolutionary science. The history of the science shows a long
and devious course of disintegrating animism, -- from the days of
the scholastic writers, who discussed usury from the point of
view of its relation to the divine suzerainty, to the
Physiocrats, who rested their case on an "ordre naturel" and a
"loi naturelle" that decides what is substantially true and, in a
general way, guides the course of events by the constraint of
logical congruence. There has been something of a change from
Adam Smith, whose recourse in perplexity was to the guidance of
"an unseen hand," to Mill and Cairnes, who formulated the laws of
"natural" wages and "normal" value, and the former of whom was so
well content with his work as to say, "Happily, there is nothing
in the laws of Value which remains for the present or any future
writer to clear up; the theory of the subject is complete."3 But
the difference between the earlier and the later point of view is
a difference of degree rather than of kind.
The standpoint of the classical economists, in their higher
or definitive syntheses and generalisations, may not inaptly be
called the standpoint of ceremonial adequacy. The ultimate laws
and principles which they formulated were laws of the normal or
the natural, according to preconception regarding the ends to
which, in the nature of things, all things tend. In effect, this
preconception imputes to things a tendency to work out what the
instructed common sense of the time accepts as the adequate or
worthy end of human effort. It is a projection of the accepted
ideal of conduct. This ideal of conduct is made to serve as a
canon of truth, to the extent that the investigator contents
himself with an appeal to its legitimation for premises that run
back of the facts with which he is immediately dealing, for the
"controlling principles" that are conceived intangibly to
underlie the process discussed, and for the "tendencies" that run
beyond the situation as it lies before him. As instances of the
use of this ceremonial canon of knowledge may be cited the
"conjectural history" that plays so large a part in the classical
treatment of economic institutions, such as the normalized
accounts of the beginnings of barter in the transactions of the
putative hunter, fisherman, and boatbuilder, or the man with the
plane and the two planks, or the two men with the basket of
apples and the basket of nuts.4 Of a similar import is the
characterisation of money as "the great wheel of circulation"5 or
as "the medium of exchange." Money is here discussed in terms of
the end which, "in the normal case," it should work out according
to the given writer's ideal of economic life, rather than in
terms of causal relation.
With later writers especially, this terminology is no doubt
to be commonly taken as a convenient use of metaphor, in which
the concept of normality and propensity to an end has reached an
extreme attenuation. But it is precisely in this use of
figurative terms for the formulation of theory that the classical
normality still lives in its attenuated life in modern economics;
and it is this facile recourse to inscrutable figures of speech
as the ultimate terms of theory that has saved the economists
from being dragooned into the ranks of modern science. The
metaphors are effective, both in their homiletical use and as a
labor-saving device, -- more effective than their user designs
them to be. By their use the theorist is enabled serenely to
enjoin himself from following out an elusive train of causal
sequence. He is also enabled, without misgivings, to construct a
theory of such an institution as money or wages or land-ownership
without descending to a consideration of the living items
concerned, except for convenient corroboration of his normalised
scheme of symptoms. By this method the theory of an institution
or a phase of life may be stated in conventionalised terms of the
apparatus whereby life is carried on, the apparatus being
invested with a tendency to an equilibrium at the normal, and the
theory being a formulation of the conditions under which this
putative equilibrium supervenes. In this way we have come into
the usufruct of a cost of production theory of value which is
pungently reminiscent of the time when Nature abhorred a vacuum.
The ways and means and the mechanical structure of industry are
formulated in a conventionalised nomenclature, and the observed
motions of this mechanical apparatus are then reduced to a
normalised scheme of relations. The scheme so arrived at is
spiritually binding on the behavior of the phenomena
contemplated. With this normalised scheme as a guide, the
permutations of a given segment of the apparatus are worked out
according to the values assigned the several items and features
comprised in the calculation; and a ceremonially consistent
formula is constructed to cover that much of the industrial
field. This is the deductive method. The formula is then tested
by comparison with observed permutations, by the polariscopic use
of the "normal case"; and the results arrived at are thus
authenticated by induction. Features of the process that do not
lend themselves to interpretation in the terms of the formula are
abnormal cases and are due to disturbing causes. In all this the
agencies or forces causally at work in the economic life process
are neatly avoided. The outcome of the method, at its best, is a
body of logically consistent propositions concerning the normal
relations of things -- a system of economic taxonomy. At its
worst, it is a body of maxims for the conduct of business and a
polemical discussion of disputed points of policy.
In all this, economic science is living over again in its
turn the experiences which the natural sciences passed through
some time back. In the natural sciences the work of the
taxonomist was and continues to be of great value, but the
scientists grew restless under the regime of symmetry and system
making. They took to asking why, and so shifted their inquiries
from the structure of the coral reefs to the structure and habits
of life of the polyp that lives in and by them. In the science of
plants, systematic botany has not ceased to be of service; but
the stress of investigation and discussion among the botanists
today falls on the biological value of any given feature of
structure, function, or tissue rather than on its taxonomic
bearing. All the talk about cytoplasm, centrosomes, and
karyokinetic process, means that the inquiry now looks
consistently to the life process, and aims to explain it in terms
of cumulative causation.
What may be done in economic science of the taxonomic kind
is show at its best in Cairnes's work, where the method is well
conceived and the results effectively formulated and applied.
Cairnes handles the theory of the normal case in economic life
with a master hand. In his discussion the metaphysics of
propensity and tendencies no long avowedly rules the formulation
of theory, nor is the inscrutable meliorative trend of a harmony
of interests confidently appealed as an engine of definitive use
in giving legitimacy to the economic situation at the given time.
There is less of an exercise of faith in Cairnes's economic
discussions than in those of the writers that went before him.
The definitive terms of the formulation are still the terms of
normality and natural law, but the metaphysics underlying this
appeal to normality is so far removed from the ancient ground of
the beneficent "order of nature" as to have become at least
nominally impersonal and to proceed without a constant regard to
the humanitarian bearing of the "tendencies" which it formulates.
The metaphysics has been attenuated to something approaching in
colorlessness the naturalist's conception of natural law. It is a
natural law which, in the guise of "controlling principles,"
exercises a constraining surveillance over the trend of thing;
but it is no longer conceived to exercise its constraint in the
interest of certain ulterior human purposes. The element of
beneficence has been well-nigh eliminated, and the system is
formulated in terms of the system itself. Economics as it left
Cairnes's hand, so far as this theoretical work is concerned,
comes near being taxonomy for taxonomy's sake.
No equally capable writer has come as near making economics
the ideal "dismal" science as Cairnes in his discussion of pure
theory. In the days of the early classical writers economics had
a vital interest for the laymen of the time, because it
formulated the common sense metaphysics of the time in its
application to a department of human life. But in the hands of
the later classical writers the science lost much of its charm in
this regard. It was not longer a definition and authentication of
the deliverances of current common sense as to what ought to come
to pass; and it, therefore, in large measure lost the support of
the people out of doors, who were unable to take an interest in
what did not concern them; and it was also out of touch with that
realistic or evolutionary habit of mind which got under way about
the middle of the century in the natural sciences. It was neither
vitally metaphysical nor matter of fact, and it found comfort
with very few outside of its own ranks. Only for those who by the
fortunate accident of birth or education have been able to
conserve the taxonomic animus has the science during the last
third of a century continued to be of absorbing interest. The
result has been that from the time when the taxonomic structure
stood forth as a completed whole in its symmetry and stability
the economists themselves, beginning with Cairnes, have been
growing restive under its discipline of stability, and have made
many efforts, more or less sustained, to galvanise it into
movement. At the hands of the writers of the classical line these
excursions have chiefly aimed at a more complete and
comprehensive taxonomic scheme of permutations; while the
historical departure threw away the taxonomic ideal without
getting rid of the preconceptions on which it is based; and the
later Austrian group struck out on a theory of process, but
presently came to a full stop because the process about which
they busied themselves was not, in their apprehension of it, a
cumulative or unfolding sequence.
But what does all this signify? If we are getting restless
under the taxonomy of a monocotyledonous wage doctrine and a
cryptogamic theory of interest, with involute, loculicidal,
tomentous and moniliform variants, what is the cytoplasm,
centrosome, or karyokinetic process to which we may turn, and in
which we may find surcease from the metaphysics of normality and
controlling principles? What are we going to do about it? The
question is rather, What are we doing about it? There is the
economic life process still in great measure awaiting theoretical
formulation. The active material in which the economic process
goes on is the human material of the industrial community. For
the purpose of economic science the process of cumulative change
that is to be accounted for is the sequence of change in the
methods of doing thing, -- the methods of dealing with the
material means of life.
What has been done in the way of inquiry into this economic
life process? The ways and means of turning material objects and
circumstances to account lie before the investigator at any given
point of time in the form of mechanical contrivances and
arrangements for compassing certain mechanical ends. It has
therefore been easy to accept these ways and means as items of
inert matter having a given mechanical structure and thereby
serving the material ends of man. As such, they have been
scheduled and graded by the economists under the head of capital,
this capital being conceived as a mass of material objects
serviceable for human use. This is well enough for the purposes
of taxonomy; but it is not an effective method of conceiving the
matter for the purpose of a theory of the developmental process.
For the latter purpose, when taken as items in a process of
cumulative change or as items in the scheme of life, these
productive goods are facts of human knowledge, skill, and
predilection; that is to say, they are, substantially, prevalent
habits of thought, and it is as such that they enter into the
process of industrial development. The physical properties of the
materials accessible to man are constants: it is the human agent
that changes, -- his insight and his appreciation of what these
things can be used for is what develops. The accumulation of
goods already on hand conditions his handling and utilisation of
the materials offered, but even on this side -- the "limitation
of industry by capital" -- the limitation imposed is on what men
can do and on the methods of doing it. The changes that take
place in the mechanical contrivances are an expression of changes
in the human factor. Changes in the material facts breed further
change only through the human factor. It is in the human material
that the continuity of development is to be looked for; and it is
here, therefore, that the motor forces of the process of economic
development must be studied if they are to be studied in action
at all. Economic action must be subject matter of the science if
the science is to fall into line as an evolutionary science.
Nothing new has been said in all this. But the fact is all
the more significant for being a familiar fact. It is a fact
recognised by common consent throughout much of the later
economic discussion, and this current recognition of the fact is
a long step towards centering discussion and inquiry upon it. If
economics is to follow the lead or the analogy of the other
sciences that have to do with a life process, the way is plain so
far as regards the general direction in which the move will be
made.
The economists of the classical trend have made no serious
attempt to depart from the standpoint of taxonomy and make their
science a genetic account of the economic life process. As has
just been said, much the same is true for the Historical School.
The latter have attempted an account of developmental sequence,
but they have followed the lines of pre Darwinian speculations on
development rather than lines which modern science would
recognise as evolutionary. They have given a narrative survey of
phenomena, not a genetic account of an unfolding process. In this
work they have, no doubt, achieved results of permanent value;
but the results achieved are scarcely to be classed as economic
theory. On the other hand, the Austrians and their precursors and
their co-adjutors in the value discussion have taken up a
detached portion of economic theory, and have inquired with great
nicety into the process by which the phenomena within their
limited field are worked out. The entire discussion of marginal
utility and subjective value as the outcome of a valuation
process must be taken as a genetic study of this range of facts.
But here, again, nothing further has come of the inquiry, so far
as regards a rehabilitation of economic theory as a whole.
Accepting Menger as their spokesman on this head, it must be said
that the Austrians have on the whole showed themselves unable to
break with the classical tradition that economics is a taxonomic
science.
The reason for the Austrian failure seems to lie in a faulty
conception of human nature, -- faulty for the present purpose,
however adequate it may be for any other. In all the received
formulations of economic theory, whether at the hands of English
economists or those of the Continent, the human material with
which the inquiry is concerned is conceived in hedonistic terms;
that is to say, in terms of a passive and substantially inert and
immutably given human nature. The psychological and
anthropological preconceptions of the economists have been those
which were accepted by the psychological and social sciences some
generations ago. The hedonistic conception of man is that of a
lightning calculator of pleasures and pains who oscillates like a
homogeneous globule of desire of happiness under the impulse of
stimuli that shift him about the area, but leave him intact. He
has neither antecedent nor consequent. He is an isolated
definitive human datum, in stable equilibrium except for the
buffets of the impinging forces that displace him in one
direction or another. Self-imposed in elemental space, he spins
symmetrically about his own spiritual axis until the
parallelogram of forces bears down upon him, whereupon he follows
the line of the resultant. When the force of the impact is spent,
he comes to rest, a self-contained globule of desire as before.
Spiritually, the hedonistic man is not a prime mover. He is not
the seat of a process of living, except in the sense that he is
subject to a series of permutations enforce upon him by
circumstances external and lien to him.
The later psychology, re-enforced by modern anthropological
research, gives a different conception of human nature. According
to this conception, it is the characteristic of man to do
something, not simply to suffer pleasures and pains through the
impact of suitable forces. He is not simply a bundle of desires
that are to be saturated by being placed in the path of the
forces of the environment, but rather a coherent structure of
propensities and habits which seeks realisation and expression in
an unfolding activity. According to this view, human activity,
and economic activity among the rest, is not apprehended as
something incidental to the process of saturating given desires.
The activity is itself the substantial fact of the process, and
the desires under whose guidance the action takes place are
circumstances of temperament which determine the specific
direction in which the activity will unfold itself in the given
case. These circumstances of temperament are ultimate and
definitive for the individual who acts under them, so far as
regards his attitude as agent in the particular action in which
he is engaged. But, in the view of the science, they are elements
of the existing frame of mind of the agent, and are the outcome
of his antecedents and his life up to the point at which he
stands. They are the products of his hereditary traits and his
past experience, cumulatively wrought out under a given body of
traditions conventionalities, and material circumstances; and
they afford the point of departure for the next step in the
process. The economic life history of the individual is a
cumulative process of adaptation of means to ends that
cumulatively change as the process goes on, both the agent and
his environment being at any point the outcome of the last
process. His methods of life today are enforce upon him by his
habits of life carried over from yesterday and by the
circumstances left as the mechanical residue of the life of
yesterday.
What is true of the individual in this respect is true of
the group in which he lives. All economic change is a change in
the economic community, -- a change in the community's methods of
turning material things to account. The change is always in the
last resort a change in habits of thought. This is true even of
changes in the mechanical processes of industry. A given
contrivance for effecting certain material ends becomes a
circumstance which affects the further growth of habits of
thought -- habitual methods of procedure -- and so becomes a
point of departure for further development of the methods of
compassing the ends sought and for the further variation of ends
that are sought to be compassed. In all this flux there is not
definitively adequate method of life and no definitive or
absolutely worthy end of action, so far as concerns the science
which sets out to formulate a theory of the process of economic
life. What remains as a hard and fast residue is the fact of
activity directed to an objective end. Economic action is
teleological, in the sense that men always and everywhere seek to
do something. What, in specific detail, they seek, is not to be
answered except by a scrutiny of the details of their activity;
but, so long as we have to do with their life as members of the
economic community, there remains the generic fact that their
life is an unfolding activity of a teleological kind.
It may or may not be a teleological process in the sense
that it tends or should tend to any end that is conceived to be
worthy or adequate by the inquirer or by the consensus of
inquirers. Whether it is or is not, is question with which the
present inquiry is not concerned; and it is also a question of
which an evolutionary economics need take no account. The
question of a tendency in events can evidently not come up except
on the ground of some preconception or prepossession on the part
of the person looking for the tendency. In order to search for a
tendency, we must be possessed of some notion of a definitive end
to be sought, or some notion as to what is the legitimate trend
of events. The notion of a legitimate trend in a course of events
is an extra evolutionary preconception, and lies outside the
scope of an inquiry into the causal sequence in any process. The
evolutionary point of view, therefore, leaves no place for a
formulation of natural laws in terms of definitive normality,
whether in economics or in any other branch of inquiry. Neither
does it leave room for that other question of normality, What
should be the end of the developmental process under discussion?
The economic life history of any community is its life
history in so far as it is shaped by men's interest in the
material means of life. This economic interest has counted for
much in shaping the cultural growth of all communities. Primarily
and mot obviously, it has guided the formation, the cumulative
growth, of that range of conventionalities and methods of life
that are currently recognized as economic institutions; but the
same interest has also pervaded the community's life and its
cultural growth at points where the resulting structural features
are not chiefly and most immediately of an economic bearing. The
economic interest goes with men through life, and it goes with
the race throughout its process of cultural development. It
affects the cultural structure at all points, so that all
institutions may be said to be in some measure economic
institutions. This is necessarily the case, since the base of
action -- the point of departure -- as any step in the process is
the entire organic complex of habits of thought that have been
shaped by the past process. The economic interest does not act in
isolation, for it is but one of several vaguely isolable
interests on which the complex of teleological activity carried
out by the individual proceeds. The individual is but a single
agent in each case; and he enters into each successive action as
a whole, although the specific end sought in a given action may
be sought avowedly on the basis of a particular interest; as
e.g., the economic, aesthetic, sexual, humanitarian, devotional
interests. Since each of these passably isolable interests is a
propensity of the organic agent man, with his complex of habits
of thought, the expression of each is affected by habits of life
formed under the guidance of all the rest. There is, therefore,
no neatly isolable range of cultural phenomena that can be
rigorously set apart under the head of economic institutions,
although a category of "economic institutions" maybe of service
as a convenient caption, comprising those institutions in which
the economic interest most immediately and consistently finds
expression, and which most immediately and with the least
limitation are of an economic bearing.
From what has been said it appears that an evolutionary
economics must be the theory of a process of cultural growth as
determined by the economic interest, a theory of a cumulative
sequence of economic institutions stated in terms of the process
itself. Except for the want of space to do here what should be
done in some detail if it is done at all, many efforts by the
later economists in this direction might be cited to show the
trend of economic discussion in this direction. There is not a
little evidence to this effect, and much of the work done must be
rated as effective work for this purpose. Much of the work of the
Historical School, for instance, and that of its later exponents
especially, is too noteworthy to be passed over in silence, even
with all due regard to the limitations space.
We are now ready to return to the question why economics is
not an evolutionary science. It is necessarily the aim of such an
economics to trace the cumulative working out of the economic
interest in the cultural sequence. It must be a theory of the
economic life process of the race or the community. The
economists have accepted the hedonistic preconceptions concerning
human nature and human action, and the conception of the economic
interest which a hedonistic psychology gives does not afford
material for a theory of the development of human nature. Under
hedonism the economic interest is not conceived in terms of
action. It is therefore not readily apprehended or appreciated in
terms of a cumulative growth of habits of thought, and does not
provoke, even if it did lend itself to, treatment by the
evolutionary method. At the same time the anthropological
preconceptions current in that common sense apprehension of human
nature to which economists have habitually turned has not
enforced the formulation of human nature in terms of a cumulative
growth of habits of life. These received anthropological
preconceptions are such as have made possible the normalized
conjectural accounts of primitive barter with which all economic
readers are familiar, and the no less normalized conventional
derivation of landed property and its rent, or the
sociologico-philosophical discussion of the "function" of this or
that class in the life of society or of the nation.
The premises and the point of view required for an
evolutionary economics have been wanting. The economists have not
had the materials for such a science ready to their hand, and the
provocation to strike out in such a direction has been absent.
Even if it has been possible at any time to turn to the
evolutionary line of speculation in economics, the possibility of
a departure is not enough to bring it about. So long as the
habitual view taken of a given range of facts is of the taxonomic
kind and the material lends itself to treatment by that method,
the taxonomic method is the easiest, gives the most gratifying
immediate results, and best fits into the accepted body of
knowledge of the range of facts in question. This has been the
situation in economics. The other sciences of its group have
likewise been a body of taxonomic discipline, and departures from
the accredited method have lain under the odium of being
meretricious innovations. The well worn paths are easy to follow
and lead into good company. Advance along them visibly furthers
the accredited work which the science has in hand. Divergence
from the paths means tentative work, which is necessarily slow
and fragmentary and of uncertain value.
It is only when the methods of the science and the syntheses
resulting from their use come to be out of line with habits of
thought that prevail in other matters that the scientist grows
restive under the guidance of the received methods and
standpoints, and seeks a way out. Like other men, the economist
is an individual with but one intelligence. He is a creature of
habits and propensities given through the antecedents, hereditary
and cultural, of which he is an outcome; and the habits of
thought formed in any one line of experience affect his thinking
in any other. Methods of observation and of handling facts that
are familiar through habitual use in the general range of
knowledge, gradually assert themselves in any given special range
of knowledge. They may be accepted slowly and with reluctance
where their acceptance involves innovation; but, if they have the
continued backing of the general body of experience, it is only a
question of time when they shall come into dominance in the
special field. The intellectual attitude and the method of
correlation enforced upon us in the apprehension and assimilation
of facts in the more elementary ranges of knowledge that have to
do with brute facts assert themselves also when the attention is
directed to those phenomena of the life process with which
economics has to do; and the range of facts which are habitually
handled by other methods than that in traditional vogue in
economics has now become so large and so insistently present at
every turn that we are left restless, if the new body of facts
cannot be handled according to the method of mental procedure
which is in this way becoming habitual.
In the general body of knowledge in modern times the facts
are apprehended in terms of causal sequence. This is especially
true of that knowledge of brute facts which is shaped by the
exigencies of the modern mechanical industry. To men thoroughly
imbued with this matter of fact habit of mind the laws and
theorems of economics, and of the other sciences that treat of
the normal course of things, have a character of "unreality" and
futility that bars out any serious interest in their discussion.
The laws and theorems are "unreal" to them because they are not
to be apprehended in the terms which these men make use of in
handling the facts with which they are perforce habitually
occupied. The same matter of fact spiritual attitude and mode of
procedure have now made their way well up into the higher levels
of scientific knowledge, even in the sciences which deal in a
more elementary way with the same human material that makes the
subject matter of economics, and the economists themselves are
beginning to feel the unreality of their theorems about "normal"
cases. Provided the practical exigencies of modern industrial
life continue of the same character as they now are, and so
continue to enforce the impersonal method of knowledge, it is
only a question of time when that (substantially animistic) habit
of mind which proceeds on the notion of a definitive normality
shall be displaced in the field of economic inquiry by that
(substantially materialistic) habit of mind which seeks a
comprehension of facts in terms of a cumulative sequence.
The later method of apprehending and assimilating facts and
handling them for the purposes of knowledge may be better or
worse, more or less worthy or adequate, than the earlier; it may
be of greater or less ceremonial or aesthetic effect; we may be
move to regret the incursion of underbred habits of though into
the scholar's domain. But all that is beside the present point.
Under the stress of modern technological exigencies, men's
everyday habits of thought are falling into the lines that in the
sciences constitute the evolutionary method; and knowledge which
proceeds on a higher, more archaic plain is becoming alien and
meaningless to them. The social and political sciences must
follow the drift, for they are already caught in it.
NOTES:
1. "The Fundamental Laws of Anthropo-sociology" Journal of
Politcal Economy, December, 1897, p. 54. The same paper, in
substance, appears in the Rivista Italiana di Sociologia for
November, 1897.
2. "The Old Generation of Economists and the New", Quarterly
Journal of Economics, January, 1897, p. 133.
3. Political Economy, Book III, chap. i.
4. Marshall, Principles of Economics (2nd.), Book V, chap. ii, p.
395, note.
5. Adam Smith, Wealth of Nations (Bohn ed.), Book II, chap. ii,
p. 289.